How Iceland’s Volcanoes Are Helping Lake Geneva Real Estate Mortgage Rates Fall

Lake Geneva real estate mortgage rates and home affordability have improved lately, thanks to an unlikely ally — Mother Nature.

In the 7 days since Iceland’s Eyjafjallajökull erupted, ash clouds have grounded planes, disrupted businesses, and stranded exports in warehouses worldwide.

It’s a drag on commerce that’s spilled over onto Wall Street.  As experts debate the potential for future seismic activity, traders are taking some of their investment risk off the table. 

In trading circles, it’s called “safe haven buying.”  When the market gets cloudy, investors often move their cash into relatively safe assets.  This includes government-backed securities — mortgage-bonds among them.

Demand for bonds rise, pushing up prices and driving down rates.

Conforming and FHA mortgage rates for Lake Geneva real estate touched a 3-week low earlier this week.

Volcanic eruptions and like natural disasters remind us: mortgage rates change for all sorts of reasons.  Some we can predict, most we cannot.  There’s literally thousands of influences on the U.S. mortgage market.

If you’ve been shopping for a Lake Geneva real estate home or floating a mortgage rate, luck’s been on your side.  Mortgage rates have fallen post-Eyjafjallajökull.  However, as ash clouds dissipate and business resumes worldwide, investors will regain their collective appetite for risk and safe haven buying will reach its natural end.

When that happens, mortgage rates will rise.

Therefore, use the seismic uncertainty to your advantage.  Consider locking your mortgage rate sooner rather than later — while rates are still low.

Travis Egan Asst Vice President Walworth State Bank 1221 South Shore Drive Delavan, Wisconsin, 53115 US	Work: 262-728-6209 Mobile: 262-745-5055 tegan@walworthbank.com www.walworthbank.com
Lender, Lake Geneva Real Estate